This week the African countries Nigeria, Benin, Togo, Ghana, and Cote d’Ivoire agreed to ban diesel imports with a sulfur content of more than 50 ppm and upgrade their refineries to produce cleaner fuels. The action was taken after a September study from the NGO Public Eye showed that trading companies such as Vitol and Trafigura “ruthlessly exploit weak regulatory” standards by blending and selling cheap, dirty fuels to African countries. The NGO analyzed diesel samples taken from the pump which contained up to 378 times more sulfur than allowed in Europe.
Many African countries already have cleaner fuel standards in place for diesel (and for gasoline as well in some cases). Most have focused on sulfur reduction, as the following figure shows.
How does Africa compare to the rest of the world? The Public Eye study shows the difference in diesel sulfur levels. Parts of Asia, Latin America, Africa and the Middle East still have diesel sulfur levels over 2,000 ppm.
African energy consumption, according to Public Eye, grew by 2.8% in 2014. Fuel demand for diesel and gasoline is expected to grow enormously on the continent along with the car fleet as incomes increase. Exxon is projecting a more than 100% increase in energy demand for transportation from 2014 to 2040 (or 5 to 10 quadrillion BTUs), representing an annual growth of about 3%. Aside from India, the African continent will experience the most growth in energy demand at 83%, according to Exxon.
However, I doubt whether refinery upgrades in many of these countries will ever happen anytime soon (if ever) because the extent and cost of the upgrades required. And these refiners can’t compete with cheaper imports from the majors. I think this will remain the case as countries shift toward tougher fuel economy standards, biofuels blending and zero emission vehicles dampening demand for conventional fuels.
Refiners and biofuels producers in Europe and the U.S. where these types of LCFV policies are being put into place leading to the dampening of conventional fuel demand there are well positioned to capture the growing market for clean fuels in Africa. Saudi Aramco may be a player in this market as well as it has upgraded refineries to produce cleaner fuels (both ULSD and ULSG with lower aromatics and benzene). However, domestic fuel demand is growing within the Kingdom as well.
Along with the growth in vehicle purchases (no doubt many are used) and fuel demand comes the attendant problem of air pollution. Particulate matter is a major issue. The chart below shows PM10 levels in selected African cities versus other world cities.
What’s ironic is that the mayors of Mexico City, Paris and London are taking some kind of action to limit diesel vehicles because of PM (PM2.5 and PM10) because it’s such a problem there. But it’s a pittance compared to what’s been observed in the African cities.
As I have pointed out before, more than 500 million African children are being exposed to increasing levels of air pollution from industrialization, urbanization and increasing traffic, according to a UNICEF study (see post Nov. 1, 2016). UNICEF advocated in that study for green investments, in particular, hybrid and ZEVs (EVs especially). That may be difficult to implement in any immediate (next 25 year) timeframe. Cleaner fuels, fuel economy standards (which some African countries are beginning to tackle) and improving public transport may be the solutions these countries turn to first.
This trend will be covered in more depth in an upcoming report of the Future Fuels Outlook service.
